Friday, 10 October 2014

From an article in The Guardian about Scotland's replacement for SDLT, known as "Land & Buildings Transaction Tax", which is the same general (bad) concept as SDLT but is calculated differently:

Tories accused the SNP of an "assault on aspiration", and estate agents said the system would penalise people who were not cash rich but needed to live in more expensive areas.

The economically illiterate Tories are assuming that the tax is borne by the "aspiring" buyer, the person trying to "move up the property ladder", it is not. In economic terms it is borne by the seller because he has to accept a lower selling price.

Now, if the up-sizing buyer is "aspirational", then what is the down-sizing seller? Whatever the opposite of "aspirational" is. So it's actually a tax on the "non-aspirational".

And we've heard the KLN time and again that LVT is a "hammer blow to the asset-rich, cash poor" and the quoted estate agents have cheerfully and incorrectly applied the same non-logic to this tax which is a tax on movers, not on stayers.

Can they please explain where "people who are not cash rich" are going to get the money to buy a home in "more expensive areas"?? Even glossing over the fact that the price comes down accordingly, so it's just like paying a larger deposit.